Tuesday, April 26, 2011

Redesigned Civic battles some tough new rivals

Nine vehicle generations. One in four people who buy a Honda buys a Civic.

The Civic's grip on the compact segment has been strong and steady. But now, as a redesigned car goes on sale, it faces a far tougher array of competitors.

The reworked 2012 Civic, which goes on sale this month, is critical for another reason: It is the first of Honda's three core vehicles receiving a redesign during the next 18 months. The CR-V compact crossover is scheduled for September, and a reworked Accord comes in summer 2012.

With every redesign, the Civic has grown substantially -- to the point that a current Civic is nearly as large as a 1994 Accord.

But just before r&d work for the redesigned 2012 Civic was ready for sign-off, the global economy collapsed. Honda Motor CEO Takanobu Ito ordered a quick rethinking of the Civic's mission.

The Civic was to have become larger and have more upscale features. But Ito felt that such a car would struggle in the conservative shopping climate and would stray from the Civic's message of economy.

"This is a carefully packaged car," John Mendel, American Honda executive vice president, said at the press preview here. "It's about understanding the needs of the segment."

At 39 mpg, the base Civic just misses the new magic mark of 40 mpg in highway driving -- something the Hyundai Elantra achieves across all trim levels -- although some Civic models do exceed that number.

Vicki Poponi, Honda assistant vice president of product planning, says fuel economy is just one piece of the puzzle. "One mile per gallon isn't going to make a difference," Poponi said. "The customer doesn't care about it that much. It's not as single-dimensional as that."

But merely building a better Civic may not be enough. The compact segment is awash in new interpretations of value, technology and styling.

"When Civic last launched [in fall 2005], the competitive set was much weaker," said Lincoln Merrihew, managing director of Compete Automotive in Boston.

"Today, Civic faces a truly brand-new Ford Focus, which has a technology and hipness factor," he said. "The Hyundai Elantra has 'wow' styling, the VW Jetta is bigger and less expensive, and the Kia Forte is 'mini muscle.' High mpg is obviously no longer just Honda's domain."

Compete's examination of consumer shopping behavior in the compact segment shows interest in the Civic tailing off toward the end of this model cycle, as would be expected. But interest in the Elantra, Focus and Chevrolet Cruze have surged to attract shoppers and threaten the Civic, Merrihew noted.

Still, McConnell's dealership is in the shadow of the Hyundai manufacturing plant, and he admits to seeing more Korean sheet metal around town.

The Civic will have "the most comprehensive and integrated campaign in Honda's history," said American Honda's chief marketing officer, Steve Center, declining to assign a dollar value to the advertising budget.

Using the tag line "To Each His Own," Honda is going to push the message of efficiency alongside its longtime serenade of quality, reliability and value, Center said.

Honda also will be active online on Facebook, YouTube and MSN.com. There will be a nationwide scavenger hunt with prize money going to charities. The Civic will be connected with the "Austin City Limits" live music TV show.

Honda also will conduct a contest in which people can submit songs online about why they desire a Civic, with first prize being a new Civic.

With new-car sales still in recovery mode, Honda estimates it will sell about 260,000 Civics a year. But should the market rebound, and fuel prices continue rising, the 2008 high of 339,289 Civics should be attainable, Mendel said.

"I think it can hit those numbers again," he said. "We are seeing small cars coming back, and we don't have to offset full-sized pickup sales. We can concentrate on Civic."